BOSTON NEIGHBORHOODS: New businesses, stores alter Financial District

Tech, communications, health care companies — and bars and cafes — are changing the vibe

Working in Boston’s Financial­ District used to mean something very specific. You wore a suit and carried a briefcase. You worked for a legal or financial services company. And when your work day ended, you went home — not out to eat at a nearby bar or restaurant.

But now those rules are changing.

A number of technology, communications, and health care companies are moving into the Financial District, shaking up the traditional mix of employees and business interests, while new restaurants, bars, and stores have opened, offering more reasons to linger after work.

“It’s setting a completely different tone,” said Bill Barrack, a managing director of Jones Lang LaSalle, a real estate services company with offices in the heart of the district. “We’re getting a lot of companies that wouldn’t even have considered the Financial District in the past.”


Financial companies still occupy large swaths of real estate in the area. But new or incoming tenants include the Internet payment giant PayPal, the engineering business Technip, and Brightcove Inc., a digital media company that moved into 80,000 square feet at the base of the Atlantic Wharf tower. In 2012, those and other companies made commitments to fill nearly 700,000 square feet in the Financial District, helping it to recover rapidly from the recession.

In the last year, the district’s vacancy rate has fallen to 11.9 percent, according to Jones Lang LaSalle. That marks a 4 percentage point decline during the year and the lowest vacancy level since early 2010.

Much of the activity is spilling over from hot markets such as the adjacent Innovation District and the Back Bay, where an influx of new companies has left little top-rated space available, causing those shopping for real estate to look harder at the Financial District.

The companies moving in are creating a more diverse business environment, with many more

NEIGHBORHOODS: Seaport District gets another restaurant invasion

Restaurants with celebrity chefs and gourmet grocer quickly set up shop in the neighborhood

Barth Anderson was among an early wave of new food entrepreneurs in the Seaport District when he opened Barrington Coffee Roasting Company last year, gambling that as the economy slowly improved the nascent neighborhood would eventually turn into a full-blown community with an active social scene.

But even he’s surprised at the speed with which the Seaport is filling in. In the next few months, another wave of restaurants and entertainment options is scheduled to open in the Seaport District, seemingly racing the developers who are rushing to fill in the area’s empty lots with office buildings and residential towers.

“In an otherwise relatively tame world of development, this area feels like it’s on fire,” Anderson said. “It’s forging ahead against all norms.”

The latest influx involves some of the biggest names in Boston’s food scene, from celebrity chef Ming Tsai to veteran restaurateurs Seth Greenberg and Tom Kershaw, with options that range from neighborhood tavern, to French bistro, to gourmet grocer.

“I’m very bullish on the whole area,” said Greenberg, the owner of Mistral who plans to open a French eatery in a former textile factory on Melcher Street next spring. “It has huge

BOSTON HOUSING NEWS: Skyline blooms as Boston OK’s over $1.5b in projects

Boston’s skyline is getting busy again.

City regulators this week approved more than $1.5 billion in new construction projects, including a $500 million expansion of New Balance’s headquarters in Brighton, as well as large residential and retail developments in Downtown Crossing, the Fenway, and the South End.

The projects promise to create hundreds of construction jobs while transforming sections of the city in coming years with apartment towers, hotels, stores, and restaurants. The pace of building activity marks an abrupt change from the recent recession, when few substantial developments were built in Boston.

“These are all solid projects, and I believe you’ll see them in the ground soon,” Mayor Thomas M. Menino said Friday, adding that together they will add more than 1,200 residences. “What we’re trying to do is build housing to accommodate a new, younger workforce coming to our city,” the mayor said.

The approval of the $620 million Filene’s redevelopment at Downtown Crossing grabbed most of the attention at the Boston Redevelopment Authority board meeting Thursday night. That project includes a 625-foot residential tower, a renovated 1912 Filene’s building, and new offices, shops, and restaurants.

But the New Balance expansion and the projects in the Fenway and South End will also bring substantial additions to those areas:

■ In Brighton, New Balance will redevelop 14 acres of industrial parcels near the Massachusetts Turnpike into a $500 million campus with a sports complex, retail stores, a new commuter rail station, and additional office buildings. The sports complex is slated to include a hockey arena and facilities for track and field, tennis, and basketball.


ADD INC.

Normandy Real Estate Partners will build apartments and a hotel on Albany Street.

■ In the Fenway, developer Abbey Group will build a residential tower with 322 residences and

RENTALS: The Cheapest, Priciest Areas to Rent an Apartment in the Hub

Everybody knows it's bad out there fortenants and very likely getting worse (forlandlords, not so much). The latest quarterly report from RentJuice/Zillow, covering approximately 85 percent of the apartment availabilities in Greater Boston, only reinforces the point.

Just take the aggregates: the average apartment rent for Boston proper in the first quarter of 2012 was $2,228, and in the second quarter was $2,503; the average apartment rent for Greater Boston was $2,218 in the earlier quarter, and $2,308 in the quarter ending June 30. Rents in some areas in particular were way up: North Cambridge, 20 percent; Belmont, 42 percent. Some were down: the rest of Cambridge, East Boston. Generally, though, the numbers reflect a rental market that appears to be trending toward ever-more demand amid tight supply, no matter how much construction there is or is planned (check out our Rental Heatmap for that).

The only real bright spot for tenants might be the availabilities coming up after the summer: Seven out of 10 rental listings being marketed now, according to the report, are noted as becoming available in early September. So there's that. 

The 20 most expensive areas:

Wellesley $4,435
Waterfront $4,255
The Harborfront* $3,667
Belmont $3,520
Needham $3,469
Arlington $3,438
Theater District $3,435
West End $3,368
Back Bay $3,328
Kendall Square $3,280
Seaport $3,262
Downtown Boston $3,256
South Boston $2,969
Bay Village $2,914
East Cambridge $2,904
South End $2,890
Teele Square $2,876
Brookline Village $2,875
Union Square $2,870
Central Square $2,853

And now the 20 cheapest:

Framingham $1,363
Everett $1,377
Norwood $1,512
Quincy $1,544

FOREIGN MONEY IN REAL ESTATE: Qatar prime minister to buy $250M of One57 condos

The prime minister of Qatar has negotiated deals to by about $250 million worth of apartments in Extell Development’s One57 tower, including a nearly $100 million penthouse, the New York Post reported. Sheik Hamad bin Jassim bin Jaber al-Thani turned his attention to Gary Barnett’s building after his bid to buy Huguette Clark’s Fifth Avenue penthouse for $31.5 million was rejected by the co-op board.

The 10,923-square-foot penthouse was already reported to be in contract for a nine-figure price north of $90 million, but the buyer’s identity was unknown. Sheik Hamad is also in discussions with purchasing four separate full-floor condominium units in the building, at 157 West 57th Street, which could bring the total purchase price to $250 million.

The Post said he had also been eying Denise Rich’s $65 million co-op, but boards were reluctant to have him as a buyer. The sheik has two wives, 15 children, armed security and a

NEIGHBORHOOD NEWS: Downtown Crossing Development

The development firm taking control of the former Filene’s property in downtown Boston said it will build a tower as high as 600 feet, rivaling the tallest buildings in the district and creating a new magnet for shoppers, diners, and residents.

At that height, the new Filene’s tower would be as tall as the Federal Reserve Bank building or the nearby One Boston Place. It would be taller and more slender than the first building proposed for the site, a 39-story building that stalled in the early stages of construction.

Principals of the new development firm, Millennium Partners, yesterday said the new tower will cost at least $500 million and include about 1.2 million square feet of residential and commercial space, including a base of retail stores, a substantial office component, and apartments on the upper floors. “What excites us about the [Filene’s site] is the opportunity to do something truly spectacular,’’ Philip Aarons, a founding partner of New York-based Millennium, said at a news conference at Boston City Hall. “It will again become the center of downtown.’’

Mayor Thomas M. Menino expressed confidence the firm will begin construction within a year, ending the work stoppage that has left a giant hole in the middle of Downtown Crossing for more than three years and that slowed a larger plan to revitalize the district.

“Millennium Partners is taking control of this project and will get it done,’’ Menino said.

Millennium is teaming up with the project’s existing owner, Vornado Realty Trust of New York, which will be a passive investor. Aarons declined to identify the amount of the firm’s investment so far, but said it will be the lead partner and present a new plan within several months.

Millennium has built large projects in major cities across the country, including the four-building Lincoln Square complex in New York, the Millennium Tower in San Francisco, and the Ritz-Carlton Hotel & Towers down the street from the Filene’s site in Boston. Anthony Pangaro, who

LUXURY HOMES: It's always home sweet home for luxury real estate

A luxury pad in one of the world's most exclusive neighborhoods might be seen as an indulgence for only the super rich. But international real estate developer Nick Candy toldCNBC that for the shrewd investor with access to capital, it can often be a long-term commitment worth making.

• 
  By Paul Sakuma, AP
  Luxury real estate can actually be a sound investment, an international developer tells CNBC.

Enlarge

By Paul Sakuma, AP

Luxury real estate can actually be a sound investment, an international developer tells CNBC.

Candy is one half of property duo Candy & Candy, whose most high-profile build was One Hyde Park — an apartment block in London's Knightsbridge area and one of the most expensive addresses in the world.

Sitting just yards from Harrods department store, the luxury boutiques of Sloane Street and a short walk away from Buckingham Palace, prices here range from a relatively modest $5 million to an astonishing $215 million for a three-story penthouse. But with 24-hour room service from the 5-star Mandarin Oriental Hotelnext door, wine cellars, bomb-proof glass and even panic rooms, is such an apartment a lavish folly or a wise investment?

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"People are buying for the long term," said Candy. "The (properties) will get passed down the generations. Something like this won't get built again for a long time."

And while a home worth $3,000-a-square-foot or more sounds like a big gamble, he is sure that long-term investments like these ride out the ups and downs of economic cycles. "I 100% believe that if you invest in the very best — not just in real estate, but in the rarefied world of commodities — then I believe that you will do very, very well."

NEIGHBORHOODS: The 10 wealthiest zip codes in Massachusetts (interactive map)

In this week's List, the Boston Business Journal Research Department ranks the 25 wealthiest zip codes in Massachusetts.

Weston, Mass. (02493) topped the list, and Needham, Mass. (02492) ranked number 25.

The source for the underlying data was Esri   , a Redlands, Calif. provider of geographic information systems (GIS) and data.

While the wealthiest zip codes, towns, places, etc., are commonly identified by household income alone, Esri's list combines several indicators of affluence. The Esri wealth rank includes average household income, average net worth, accumulated wealth and the rate of increase in wealth (as measured by current income).

Use the slide show interactive map  to explore the 10 wealthiest zip codes in the state. The full

LUXURY HOMES: The most expensive Massachusetts homes sold in 2011

Most expensive home sales in 2011

$15.6 million. 75 Doublet Hill Rd.,Weston, Mass. Built in 1998, the 11,607-square-foot, 14-room brick Colonial has six bedrooms, 8.5 baths and 9 fireplaces. The property was purchased in March by Stephen V. Kenney.

$10.6 million. 153 Brattle St., Cambridge, Mass. The 208-year-old Colonial near Harvard Square has 6,097 square feet of living space, with 12 rooms, seven bedrooms and 9 fireplaces. The home was purchased in July by Silvana Giner.

$8.75 million. 128 Commonwealth Ave., Boston’s Back Bay. The three-level, eight room condominium minutes from the Public Garden was built in 1899 and has 3,520 square feet of living space, three bedrooms and 3.5 baths. The mid-rise was purchased in January by Philip J. Dubuque.

$8.35 million. 15 Dogwood Rd., Weston, Mass. The three-year-old, 9,050-square-foot Colonial has 14 rooms, five bedrooms, seven full baths, three half baths and three fireplaces. The home was purchased in March by Susan Silberberg.

$7.15 million. 19 Marlborough St., Boston’s Back Bay. The 9,025-square-foot, 1860 Row house on the first block of Marlborough St. features 10 rooms, six bedrooms, six fireplaces,

BOSTON NEIGHBORHOODS: $220m residential tower breaks ground downtown

Millennium Partners-Boston yesterday broke ground on a 15-story residential tower across from the Ritz-Carlton in downtown Boston, the latest developer to start work on a large housing development in the city.

The $220 million Hayward Place will include 256 residences and 9,700 square feet of retail space in a glass and stone tower that will replace a scrubby parking lot near Downtown Crossing.


The residences are slated to be a mix of condominiums and apartments and will include one-, two-, and three-bedroom units. Hayward Place is the second large residential development to break ground in the neighborhood recently; the Kensington, which started construction earlier in the fall, is slated to add 381 units.

“New economic growth is really taking hold,’’ Mayor Thomas M. Menino of Boston said during an event to celebrate the formal start of construction yesterday. “In the last quarter, we had 1,000 new housing units break ground. The last time we saw that was in 2006’’ at the height of the real estate market, he said.


Hayward Place, designed by Handel Architects of New York, will complete Millennium Partners’ revitalization of a section of Washington Street long known as the Combat Zone for the collection of seedy strip clubs and bars that once dominated the area. In 2001 and 2002, Millennium completed the Ritz-Carlton Hotel Towers project that helped spur other redevelopment in the area, including the renovation of the Boston Opera House and the Paramount and Modern theaters.


“This is a neighborhood now,

NEIGHBORHOOD NEWS: Shreve, Crump & Low relocating to Newbury Street

Luxury jeweler Shreve, Crump & Low will move its flagship Boston store to Newbury Street as the first step in a reorganization that will absorb a separate company owned by Shreve’s chief executive and expand its facilities in Chestnut Hill.


Shreve will move from 440 Boylston St., where it has operated for seven years, to 39 Newbury St. around the end of the year. In addition, Shreve will take over and rename Chestnut Hill jeweler David & Co., also owned by chief executive David Walker, establish its corporate headquarters there, and double the size of the location to 12,000 square feet over the next 18 months.


“It is really a transitional and growth period in the history of Shreve, Crump & Low,’’ said Brian Walker, assistant of operations at the company and David Walker’s son. “Moving to Newbury Street will bring a heightened level of luxury to Shreve, Crump & Low and having a location in Chestnut Hill will help to better serve our Metro West clientele.’’


The moves by Shreve, which has operated in Boston since the late 18th century, come as the jewelry industry rebounds from the recent recession and pullback in consumer spending. Zale Corp., the North American jewelry chain retailer, reported same store sales rose 8.1 percent in the fiscal year that ended in July, compared to a decrease of nearly 7 percent in the previous year. Annual revenues increased 7.8 percent or $126 million.


Tiffany & Co. the global jeweler based in New York, recently reported that sales in the three months ending in July jumped 30 percent compared to the same period a year ago. Shreve, Crump & Low said its sales grew at a double-digit percentage rate in 2010 and are ahead of that pace this year.


“I think things have corrected themselves after 2008,’’ Brian Walker said. “There’s been a steady balancing growth across the board. Boston has a stable, strong economy.’’


The new Boston store will lose 2,000 square feet or 25 percent of selling space compared to the jeweler’s current location. But the owner believes the three levels of jewelry, giftware, and repair service will provide a more intimate shopping experience, responding to feedback from customers that they felt overwhelmed by the amount of space and merchandise in the Boylston Street store.

MARKET TRENDS: High-end sales push city’s condo prices up 10.2%

$487,000 median near peak; luxury sector at $735,000

Boston’s downtown condo market enjoyed a double-digit price increase this spring as buyers snapped up homes in luxury buildings, pushing prices to near-peak levels, new data show.


Citywide, the median price swelled by 10.2 percent to $487,000 in the second quarter of 2011, compared to the same period last year, according to Listing Information Network, a Boston company that tracks the downtown condo market. The city’s peak was $499,000 in 2008, before the national financial crisis stalled sales and frightened away buyers, according to data provided by the information network.


Median prices headed upward partly because of increased sales in high-end buildings like 45 Province, the Clarendon, and the Residences at W Boston. Two properties at the Mandarin Oriental each sold for more than $12 million in June.


“Confidence has resumed in the market,’’ said Wayne Lopez, director of sales and marketing for 45 Province, which has sold or put under agreement 32 homes over the last year.


The Clarendon has sold nearly 75 percent of its 102 units, which went on the market starting in December 2009. Kim Sherman, an official with the Clarendon, said sales have been strong because of the building’s benefits as well as the change in the market. “There’s a shift in the mood,’’ she said.


The median price for luxury buildings, those with a valet, concierge, and other services, jumped 13.1 percent in the quarter to $735,000, just $15,000 lower than the 2008 peak, according to the information network.


Sales in the luxury condo market increased by 26.8 percent compared to the same time last year, while overall sales dropped by almost 10 percent, new data show. Luxury sales represented about 17 percent of all sales in the second quarter.

Penthouse sells for record $13.2m as Hub’s high-end condo market picks up.


The prime penthouse at the Mandarin Oriental has again set a record for the most expensive condo sold in Boston, though the $13.2 million price was little more than what the sellers paid for it three years ago. And still it’s never been lived in.

The 6,829-square-foot unit, which has sweeping views of the city and more balcony and deck areas than most homes have living space, sold last month for only $100,000 more than what the seller bought it for in 2008 when the Mandarin had just opened.


“It’s the ultimate penthouse in the city of Boston,’’ said Tracy Campion, the downtown real estate agent who brokered the sale.


Wilbur Development LLC bought the penthouse three years ago for about $13.1 million as an investment, after a previous buyer, a Florida real estate developer, backed out of buying it for $14 million. That buyer said the unit had too little sunlight. Wilbur first listed the property for $16.9 million in October 2008.


It is possible Wilbur might have even lost money on the deal, although there is little information in public records about how the company financed the transaction and company officials did not return calls seeking comment. For example, condo fees for the penthouse run more than $10,000 a month, and Wilbur owned the unit for 33 months.


Right now it doesn’t have a stick of furniture in it. In real estate parlance, it is “raw’’ space, empty and unfinished, as Wilbur Development bought it as an investment and never moved in.


The new owner intends to be one of the first to live there, according to Campion. He is Henry

RENTALS: Luxe condo rentals find eager market

The rental class has never had it so good.

Developers offer glut of properties — with perks.

Due to a glut of glitzy condo towers and the need to appease skittish lenders, some developers have found a new use for the gilded, clubby preserves once meant for buyers who could afford the seven-figure price tags. They’re renting them out and offering all of the perks normally reserved for the elite. The hand-watered grass roofs and outdoor movie theaters. The heated, valet-attended porte cocheres. The pet spas offering canine cardio and play dates for your puppy.

And developers have found that renters — reluctant to buy in a still-unsteady market —are embracing them. One marketing banner flapping against a ritzy, new rental building in New York says it best: “Repent. Rent. Repeat.’’

Frank Gehry’s crumpled, stainless-steel skyscraper in Manhattan — the tallest residential tower in the world — was originally supposed to include 200 sprawling condos along with 700 rentals. Now all of the critically acclaimed building’s apartments are for rent. The units, whose rents start at $2,630 for a 600-square-foot studio, are even rent-stabilized — meaning rents are regulated so tenants will only see small annual increases. The upgrades aren’t limited to New York buildings. In Chicago, a 547-square-foot studio in the Jeanne Gang-designed Aqua, with its liquid, undulating glass skin and curving balconies, can be had for $1,571. In late April at Silicon Valley’s Three Sixty Residences, the sales office re-opened as a rental office. Since 2007, not one of the building’s sleek condos, with their Bosch appliances and Del Tango cabinetry, had made it out of escrow and into a final sale, despite the fact that the plush residence sits in the middle of Silicon Valley, one of the nation’s top 10 millionaire hotspots.

During the credit bubble, the 651 units in New York’s MiMA might have gone into bidding wars, as similar properties had. Instead the developer put 500 of the apartments on the market as rentals. Since rentals in the Hell’s Kitchen building became available in mid-March, 70 percent of the rentals have been leased.